Top Service News
Cash is getting harder to collect. What can I do to improve cash collections?
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At Top Service we promote the use of great customer relationships to support our members’ business growth and help to improve cash flow.
To improve cash collections it’s important to understand that this part of the business is as important as any other. Provide support or even extra training & credit management tools to the person or people responsible for chasing invoices.
For us, credit management starts right at the beginning of your customer relationship. There are few simple steps you can take that will make big improvements:
If Cash is King then Information is Queen
Use a credit application form. This will help you to deliver a great service to your customer and will also help you to collect information that will help you if you need to carry out due diligence checks prior to deciding whether to extend credit facilities or collect money from a customer. You can also help to prevent delays in payment by understanding what your customers need to be able to make payment.
Your credit application should support your relationship with your customer, it should include information to help you deliver a great service, support you with getting invoices paid on time and collate useful information for if you need the support of a 3rd party collections agency.
Reacting to information will be key. You should be monitoring your customers so you’re aware of any changes. If you’re notified of a new CCJ, check how much is outstanding from your customer and in cases where you perhaps aren’t due to chase an invoice until the end of the month, put a phone call in now or at least start chasing a little earlier than usual.
Start Your Collection Process Early – Before Invoices Are Due
Once you’ve provided your goods or service to a new customer and raised the invoice – check in on them. How did they find the service you provided? Did they receive the invoice OK? Do they need to place any further orders?
By carrying out these customer service checks you’re not only standing out from your competitor, you’re building great customer relationships, helping your business to grow and also going someway to get your invoice paid on time.
Checking there are no queries, that the invoice has been received and that your customer has everything they need to make payment can only have a positive impact on your payment terms.
Make Your Invoice Work For You
Your invoice is one of your best opportunities to be paid on time. Make your invoice as informative as possible, whilst keeping everything clear and easy to understand.
Give your customer all the details they need to make payment, include your bank details and any reference numbers they should include, if you accept and expect card payments give your customer the telephone number they should call to make the payment. Invoice promptly and accurately.
These seemingly simple steps can have a big impact.
Evaluate & Act
Take time to evaluate the reasons invoices aren’t being paid. Are there a lot of queries on invoices? What are the queries – is there a simple step or a change in procedure that could be taken prior to the invoice being raised that could reduce the queries?
Are your customers claiming invoices aren’t received? Is there a quicker, more effective way you could be sending invoices? Are you sending invoices to the correct address? Or are going to a site address and then having to be forwarded to the head office address?
Spot Changes
Keep an eye on anomalies, if your customer is later than usual making payment. Find out why, it could be as simple as an invoice has been mislaid. Or it could be something more serious that you need to act upon.
Use a Supporting 3rd Party – That Understands Your Business & Your Needs
Consider using a third party to support your credit control. It’s likely that if you’re having to chase your customer for payment, then they are also being chased by other creditors. Using the right 3rd party at the right time can be of real benefit. It doesn’t need to be an aggressive process. Your chosen 3rd party should work with you and be able to provide a range of solutions that work for you and also for the relationship you have with your customer.
Our team can provide you with individual advice and support if you need it and we also have a credit control healthcheck available on our website that is free for members to use. We will review the check and provide bespoke advice to you and your business.
Contact our helpdesk team today on 01527 518800 to discuss how Top Service can support and help you protect your business.